TIPS TO BUYING A HOME IN THE VALLEY What is the first step to buying a home? Finding out what you can afford is one of the fist steps, which can be done by pre-qualifying for a home loan. This step will help you narrow your search for both a neighborhood and particular houses. A pre-qualification is a simple calculation that considers several factors, but primarily your income. There are no guarantees with a prequalificaiton, but it will be expected of you when you make an offer on a home. What are the pros and cons of adding on or buying new? Before making a choice between adding on to an existing home or buying a larger one, consider these questions: * How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house? * How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level? * What do local zoning and building ordinances permit? * How much equity already exists in the property? * Are there affordable properties for sale that would satisfy housing needs? Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value. According to Remodeling magazine’s annual “Cost vs. Value Report,” remodeling a home not only improves its livability but its curb appeal with potential buyers. The highest paybacks come from updating kitchens and baths and, most recently, adding on a home office, according to the survey. For more information, check out “The Do-able Renewable Home,” a free booklet available from the American Association of Retired Persons, Fulfillment Department, 601 E St., N.W., Washington, DC 20049; (202) 434-2277. What do all of those real estate acronyms in the ads mean? If you find yourself stumbling over weird acronyms in a real estate listing, don’t be alarmed. There is method to the madness of this shorthand (which is mostly adopted by sellers to save money in advertising charges). Here are some abbreviations and the meaning of each, taken from a recent newspaper classified section: * assum. fin. — assumable financing * dk — deck * gar — garage (garden is usually abbreviated “gard”) * expansion pot’l — may be extra space on the lot, or possibly vertical potential for a top floor or room addition. Verify actual potential by checking local zoning restrictions prior to purchase. * fab pentrm — fabulous pentroom, a room on top, underneath the roof, that sometimes has views * FDR — formal dining room (not the former president) * frplc, fplc, FP — fireplace * grmet kit — gourmet kitchen * HDW, HWF, Hdwd — hardwood floors * hi ceils — high ceilings * In-law potential — potential for a separate apartment. Sometimes, local zoning codes restrict rentals of such units so be sure the conversion is legal first. * large E-2 plan — this is one of several floor plans available in a specific building * lsd pkg. — leased parking area, may come with an additional cost * lo dues — find out just how low these homeowner’s dues are, and in comparison to what? * nr bst schls — near the best schools * pvt — private * pwdr rm — powder room, or half-bath * upr- upper floor * vw, vu, vws, vus — view(s) * Wow! — better check this one out. Resources: * “Real Estate’s Ambiguous Language You Oughtta Understand,” Glennon H. Neubauer, Ethos Group Publishing, Diamond Bar, CA; 1993. Do we dig deep and buy a dream home or settle for a starter home? Choosing between a smaller house in an affluent neighborhood, an older, bigger house in a more working-class community or a brand-new home is not easy. If you’re in this situation, start by examining your priorities and asking the following questions: * Is the surrounding neighborhood or the home itself the most important consideration? * Is each of the neighborhoods safe? * Is quality of the schools an issue? * Do any of the areas seem to attract more families with children or adult residents? And where do you fit in? As for the return on your investment, home-price appreciation is hard to predict. In the late 1980s, the more expensive move-up housing appreciated wildly. But during the recession that followed, smaller homes tended to hold their value better than more expensive ones. How do I get the real scoop on homes I am looking at? Home inspections, seller disclosure requirements and the agent’s experience will help. Disclosure laws vary by state, but in some states, the law requires the seller to complete a real estate transfer disclosure statement. Here is a summary of the things you could expect to see in a disclosure form: * In the kitchen — a range, oven, microwave, dishwasher, garbage disposal, trash compactor. * Safety features such as burglar and fire alarms, smoke detectors, sprinklers, security gate, window screens and intercom. * The presence of a TV antenna or satellite dish, carport or garage, automatic garage door opener, rain gutters, sump pump. * Amenities such as a pool or spa, patio or deck, built-in barbeque and fireplaces. * Type of heating, condition of electrical wiring, gas supply and presence of any external power source, such as solar panels. * The type of water heater, water supply, sewer system or septic tank also should be disclosed. Sellers also are required to indicate any significant defects or malfunctions existing in the home’s major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundation, as well as the electrical and plumbing systems. The form also asks sellers to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without the necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property. Also look for, or ask about, settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides. People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions. It’s important to note that the simple idea of disclosing defects has broadened significantly in recent years. Many jurisdictions have their own mandated disclosure forms as do many brokers and agents. Also, the home inspection and home warranty industries have grown significantly to accommodate increased demand from cautious buyers. Be sure to ask questions about anything that remains unclear or does not seem to be properly addressed by the forms provided to you.